Part of Bob’s continued ramblings.
Today’s topic on Founders Corner is about the rise and fall of the fast checkout companies like Fast and Bolt. I’ve been following them for quite some time since we are in the payments business and we have focused on having a fast signup and checkout experience for our customers. I wrote about a blog yesterday about optimizing conversions and our concerted efforts about 6 years ago to bring about 1-click to race registration to races.
If you have not been following this like me, there was a wave of investments and breathless enthusiasm over optimizing the checkout process on the web.
“our growing network of tens of millions of shoppers ready for one-click-checkout, we’ve helped democratize commerce for retailers and made shopping better for consumers.”Bolt – January, 2022
The basic premise of these new companies was that they had innovated two things:
- Fast Checkout
- Community of millions of customers
When these pronouncements were being made, I tried the actual experience of becoming a merchant using them, as well as being a consumer who bought something with their checkout. What I found at the time was that “there was no there there”. Specifically, the merchant experience left the merchant with insufficient data on the purchaser and what was purchased. For the consumer, I had to sign up and get on yet another list that marketed to me. And it really was not faster. And the technology was not that good.
In addition, it seemed like these companies were overhyping what they had, and artificially inflating their numbers by spending huge amounts of money to source leads. That sourcing of leads was unsustainable, and the volume of email addresses they collected was not large enough for their remarketing and referral efforts to work out.
They also had the problem that they were running head into various markets that have very, very large and competent competitors. On the payments side Stripe, Square, Adyen, PayPal, Venmo and others have the real data of the credit card holder (and successfully resell that via a variety of clever revenue generation schemes on the back end that is transparent to us consumers) – oh, and the payment companies have been doing one click checkout for years just like we have. On the ad side, they are running directly into Google, Facebook, TikTok as well as the platform side of Apple and Amazon that also have really, really deep customer data for marketing and also offer that as a service (and of course Amazon has that 1-click service as well).
Finally, for the merchant – the organization selling the service or the product – the experience was poor. They often were not able to collect the information that they needed with a fast checkout experience. And if they did collect the information they needed, well, the payment vendor provided that fast checkout service already.
So I waited to see what would happen.
The past few months have brought all of my concerns to light.
Their founder, Domm Holland, was always recognized as a shameless promoter. From the above article:
“The company, founded by Domm Holland and Allison Barr Allen, went on to describe itself as a “trailblazer,” saying that not all such parties make it to “the mountain top,” claiming that while it failed, the startup managed to “forever” change the world online commerce. How much credit the short-lived company can actually claim for work in the one-click checkout market is far from clear, but at least Fast is going out as it lived: giving itself more props than perhaps its business results warranted.”Techcrunch, April 5, 2022
And Bolt is going down a similar path:
“On April 26, Bloomberg reported that Bolt was being sued by “its most prominent customer,” Authentic Brands Group (ABG), which owns dozens of retail brands. ABG alleged that San Francisco-based Bolt failed to deliver technology that it promised and that it missed out on over $150 million in online sales during the company’s integration with fashion retailer Forever 21. Oof. On top of that, ABG’s complaint went on to say that Bolt had raised funding “at increasingly high valuations” by “consistently overstating” the nature of its integrations with the company’s brands in an effort to make it seem like it had more customers than it actually did. For context, Bolt in January raised $355 million in a Series E financing that valued the company at $11 billion.”Techcrunch May 1, 2022
Of course, the reasons to study situations like this is to try to learn lessons from them. For me, one of the key lessons is to try to really understand the true value of what you as an entrepreneur are bringing to customers. It is a unique combination of helping your customer be successful (in our case event directors), having realistic expectations for yourself and your company in terms of what you do, and finally having something really tangible. Perhaps that is because I am not a gifted sales person like Domm is. Or I don’t get influenced too much by the hype of Silicon Valley. Or perhaps our company is in a market that simple takes time and effort to understand and develop solutions to our customer’s challenging problems.
It returns to one of my basic philosophies – Aggressive Patience… These companies forgot the Patient part…